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Press comment: Uprating frozen state pension costs could be hard to stomach

If you’re covering updated estimates on the cost of uprating frozen state pensions released by the Department for Work and Pensions please see the following comment from Jon Greer, head of retirement policy at Quilter.

“At the end of last year there were renewed campaigns for the government to end a policy that means half a million ex-pats get thousands less per year in state pension payments because of where they live. The DWP has now updated their estimates of the cost of uprating and found that bill would be around £3.1billion over the next five tax years.

“Currently the majority of pensioners living in the UK have their state pension increased according to the triple-lock principle, by a minimum of 2.5 per cent, the rate of inflation, or average earnings growth, whichever is the highest. This also applies to ex-pat pensioners living in certain countries, such as the US, all European Union countries, Barbados, Bermuda and Israel. However, this does not apply for pensioners living in countries such as Australia, Canada, New Zealand and South Africa do not.

“The update is a useful exercise as there had been disagreements over how much such a policy change will cost. Changing the 70 year old rules on ex-pat pensions could be seen as an opportunity to win favour with parts of the public, but with the state pension already eating away at an astronomical amount of the budget, it might be hard one for the Chancellor to stomach.”

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.